Corestate cancels IPO due to 'difficult market environment'

Sascha Wilhelm - CORESTATE

CEO Sascha Wilhelm said that, although the market environment for small and mid-cap IPOs had "deteriorated considerably" since the announcement of the IPO, the company would continue with its expansion plans and stick with its 2015 growth targets. "There is no reason on the part of shareholders and the company to deviate from our current expansion plans for 2016," he said in a statement.

The Luxembourg-headquartered Corestate Capital had planned to fix the issue price for its impending IPO on Tuesday 3rd November, but instead decided to cancel the flotation on the Frankfurt Stock Exchange at the last minute, citing "the currently difficult market environment for IPOs in the German and UK stock markets, which are of particular relevance to the company."

CEO Sascha Wilhelm said that, although the market environment for small and mid-cap IPOs had "deteriorated considerably" since the announcement of the IPO, the company would continue with its expansion plans and stick with its 2015 growth targets. "There is no reason on the part of shareholders and the company to deviate from our current expansion plans for 2016," he said in a statement.

Corestate had planned to raise €253m in the flotation, with about €100m flowing to the company. Founder Ralph Winter with a 64.2% stake and co-founder Thomas Landschreiber with 6.7% had planned to reduce their holdings to a small minority stake, together with listed Swiss investor Intershop Holding with its 28% holding.

The IPO plan was announced in early-October and ten days later the share price spectrum was put at €23.50 to €28.50. This would have generated €209m to €253m, and a net €100m for the company through the issue of 4.3m new shares, resulting in a free float of 52.5%. The offer was to have also included a customary greenshoe option of up to 15% of the volume of the offering, comprising existing shares from the holdings of the existing shareholders.

Corestate had planned to use the additional proceeds to increase transactions and execute higher-volume deals above the €300m mark on a selective basis. Its targets are to expand the currently €1.4bn of assets under management to €5bn over the next three years. Its focus will remain on German, Austria and Spain. It entered the Spanish market this year through a joint venture with two local companies, including the Villa Mir group, with whom it is developing a €240m multi-use tower in Madrid.

Corestate co-founder and CIO Thomas Landschreiber said recently that the company has already invested €700m so far this year and plans to invest another €300m before the year-end. In June, it bought a 170,000 sqm retail portfolio comprising 35 properties across Germany for €370m.

The existing pipeline is also full, said Landschreiber, with about €200m in German high street properties likely to be closed on before year end. It is also buying land on which to develop student apartments, and has long had experience of the sector through its majority ownership of listed student housing developer YOUNIQ.